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UPDATE 1-Malaysia's AirAsia posts loss as revenue tumbles, but business 'stabilised'

* Have stabilised airline in Q2 - President

* Able to sustain operations on domestic services in 2020 - President

* Expenditure cuts could not offset revenue fall (Adds detail, executive comments)

KUALA LUMPUR, Aug 25 (Reuters) - Malaysia’s flagship budget airline AirAsia Group Bhd slipped to a loss in the second quarter, it said in a bourse filing on Tuesday, posting a fourth straight quarterly loss as revenue dropped.

However, its president for the airline unit Bo Lingam said the group has stabilised the airline business during the quarter.

“We have stabilised the airline ... We will be able to maintain sustainable operations on the back of our domestic services for the rest of the year if travel restrictions and border closures remain in place,” he said in a separate statement, adding that fares had improved.

AirAsia’s net loss for the April-June quarter reached 993 million ringgit ($238 million), compared with a net profit of 17.3 million ringgit in the same period a year ago.

Revenue fell 96% to 119 million ringgit.

The airline temporarily mothballed its Malaysia and Philippines fleets in March, and significantly reduced flights in Indonesia as the coronavirus pandemic forced border closures in many countries.

“The reduction of group expenditure could not offset the decrease in revenue as passenger demand collapsed due to the widespread border closures and certain onerous travel restrictions,” AirAsia said.

The airline carried 204,082 passengers in the three-month period, a 98% drop from a year ago. That resulted in a 59% load factor, a measure of how full planes are.

AirAsia has applied for bank loans in its operating markets and has been presented with proposals from investment bankers, lenders and potential investors to raise capital.

Barring any reversal of flight resumption plans and any major shock to demand, the group said it has sufficient working capital to sustain business operations.

The airline also said it had pivoted to its digital business during the pandemic hit, with revenue on its e-commerce platform AirAsia.com up 137% on the year.

$1 = 4.1660 ringgit Reporting by Liz Lee Editing by David Holmes and David Evans

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